Thursday, August 18, 2005

Residential Racial Segregation: A Surprising Trend

As the black middle class grows, many black households choose to live in the suburbs in more integrated communities. One prominent urban economics study documented that black youths are more likely to drop out of the labor force and stay in school for fewer years when they live in more segregated metropolitan areas relative to observationally identical black youths who live in less segregated metropolitan areas (See Cutler and Glaeser 1997). Aggregate trends (based on census tract data) show that overall residential racial segregation has declined over the last 30 years. These data seem to show that black households want to live in integrated communities and that their children benefit from growing up in such communities.

I love studies that challenge the conventional wisdom. Recently I read such a study that challenges the above paragraph. It argues that an important trend over the last 30 years has been rising black educational attainment. In the year 2000, a larger percentage of the black population has college degrees than in 1970. The paper argues that in 1970 a black household who wanted to live in a residential community with lots of college graduates had to live in a white community. Back then, there were very few communities that featured a large share of residents who are black and college educated. Unlike in the past, today there are more residential communities featuring a large share of residents who are both black and college educated. The authors report evidence that racial segregation is decreasing less over time in metropolitan areas where black educational attainment is rising.

Separate When Equal? Racial Inequality and Residential Segregation by Bayer, Fang, and McMillan “In contrast to conventional wisdom, this paper identifies a powerful mechanism which can lead to persistent and even increasing residential segregation when racial differences in education and other sociodemographics narrow. We document that middle-class black neighborhoods are in short supply in many U.S. metropolitan areas, forcing highly educated blacks either to live in white neighborhoods with high amenity levels or in more black neighborhoods with lower amenity levels. A simple model then shows that increases in the proportion of highly educated blacks in a metropolitan area may lead to the emergence of new middle-class black neighborhoods, relieving the prior neighborhood supply constraint and causing increases in residential segregation. Cross- MSA evidence from the 2000 Census indicates that this mechanism does in fact operate: as the proportion of highly educated blacks in an MSA increases, so the segregation of educated blacks and blacks more generally goes up. Our empirical findings are robust and have important implications for the evolution of residential segregation.” http://www.nber.org/papers/w11507

This paper uses empirics to flesh out an argument that would resonate with Malcolm X.

A recurrent theme in my blog is returning over and over again to heterogeneity. In today’s entry black middle class households differ with respect to their preferences over community attributes. I’m sure that there are some households who greatly prefer to live in an all black community. This could be due to reverse-racism but a more plausible explanation is that this group wants access to stores and services that are more likely to be available in such a community. In addition, minority households may find day to day life less stressful in a social environment where they are the majority group.

In a diverse world, there are also black college graduates who want to live in integrated communities. The challenge in doing empirical work is to try to estimate the distribution of "types". Intuitively, what percent of college educated blacks want to live in all black communities versus what percent desire to live in integrated communities?

Are there important public policy issues here? Is it a “bad thing” if the black middle class self-segregates? Returning to the social capital literature and in particular Robert Putnam’s work, I don’t see how “bridging” social capital can take place across groups if such residential segregation takes place. In the elite universities I’ve taught at, I’ve seen extreme levels of racial segregation among students in terms of who eats with who and who studies with who. The Deans try to build a diverse community but I’ve been disappointed by how little “bridging” I see across groups.

Before public policy debate can take place, we need to know the basic facts and have some understanding of what might be the causal process generating the facts. Bayer, Fang, and McMillan’s paper plays a key role here. (If you want a copy of this paper, Bayer is at Yale’s Economics department)